We present a flux-based wave decomposition (FBWD) scheme for numerical computation of isentropic two-fluid two-phase flows. We use Tait's equation of state for both the gas and the liquid phases. Extension of the scheme to the second order is made by the MUSCL-Hancock approach. The solutions of several two-phase shock tube problems resulting from the present scheme are compared with the solutions obtained by the earlier HLL scheme. Investigation of the effect of the interfacial pressure models and the drag coefficient are also included. It is concluded that the present FBWD scheme is robust and accurate for computation of isentropic two-fluid models.